If you’re feeling the pinch this New Year, a loan may help get you back on track

If you’re feeling the pinch this New Year, a loan may help get you back on track

After all the expense of Christmas, it’s not unusual for people to consider taking out a loan to get their finances back in shape for the New Year. Of course, it is a more sound financial approach to plan ahead and save enough money for Christmas in advance. But sometimes, this just isn’t possible for people – and taking out a loan is a much better approach to debt than leaving large unpaid balances on a store or credit card that might have high rates of interest.

With the cost of many things in the UK going up, Christmas might have been more expensive than you expected. It has been well publicised in the press that food prices in this country are rising – and Christmas is a time when most people want to indulge a little more than usual. Also, you might be playing host to a number of guests over the Christmas season and feeding more mouths than usual. All of this can soon add up and leave you with a bigger Christmas bill than you’d expected.

Then, of course, there are the presents to consider. Most people see Christmas as a time to treat the people they love – and while there’s no substitute for spending time with family and friends at Christmas – giving and receiving presents is all part and parcel of the season. But, of course, many gifts come with a high price tag and the costs could really mount up.

If you were struggling to get on top of your finances in 2012, because you’ve got a number of different debts, a debt consolidation loan may help in 2013. Even if you’re managing to meet your repayments, it could be that you’re finding dealing with so many companies tricky and confusing. And that you’re managing multiple repayments to credit cards, store cards, loans and overdrafts – on different dates.

With a debt consolidation loan you may be able to simplify things by taking up just one loan to pay off all of your other debts – this could make them much more manageable. This would leave you with one loan to repay, which means just:

One companyDealing with just one company will make managing your loan a lot easier – one payment, one point of contact.

One monthly fixed repaymentMake repayments simpler with just one fixed payment each month. But you may have to pay a settlement fee on your existing borrowing.

One interest rateWhen you’re paying multiple debts, you could end up paying back various rates of interest. But with a debt consolidation loan, you just pay one. You could end up with a lower rate of interest if your existing debts have higher interest rates, which in turn could reduce the overall amount you have to pay back. But equally, your new interest rate could end up being higher than the one you’re paying now.

One final end dateWhen you’ve chosen a timeframe for your repayments, you can work out the date when your debts will be paid off. And if you’re struggling to pay a certain amount back each month, you could reduce your monthly repayments by increasing the loan term. However, this may mean that you may pay more interest overall.

If you think a debt consolidation loan will help to give you peace of mind, why not try out Halifax’s loans calculator? It’s easy to use and will give you an idea of how much you could borrow – and how much the monthly payments would be over various timeframes. Existing Halifax customers, who are UK residents and 18 years or over could borrow anything from £1,000 up to £25,000, over a one to seven year period.